Mayor, Councilmembers propose repealing business tax

“In these tough economic times, we want to do everything possible to create jobs and help businesses grow,” said Nickels.

Known as the “employee hours tax” or “head tax,” the annual $25 per employee tax was initially introduced in 2006 to fund city-wide transportation projects. The head tax has long been opposed by local business owners, who find the tax unnecessary and difficult to administer.

“We have worked closely with the mayor over the past few months to identify obstacles to economic growth and we agree that repeal of this tax will encourage job growth,” Councilmember Burgess said. “The employee hours tax has generated less revenue than anticipated, but more importantly it has negative consequences because it taxes the creation of new jobs.”

In repealing the tax, Nickels, Burgess, and Conlin hope to signal the city’s dedication to job growth and business satisfaction.

“We asked the business community what would help them get back on their feet, and this was one of their first suggestions. That’s why my Committee of the Whole on Economic Recovery decided to address this issue. We’re removing a barrier to getting people back to work,” said Council President Conlin.

Read more Seattle Times’ coverage of the employee head tax here.
Read the Mayor’s full press release.